The recent trends depicts that - despite all the odds - the industry has conceivably reached a formative stage and in the coming years, poised for high growth.

Domestic Software Market

The market size of software and IT enabled service industry within the country is estimated to be more than BDT 3.0 billion / year. With hardware (PC, Server, Network equipment) and Internet & other network services, the total ICT industry in the country is estimated to be approximately BDT 11 billion / year.

Of the total industry, the size of software segment (mainly comprising customized and packaged software- not including different types of IT enabled services like multimedia, animation, digitization etc.) is estimated to be around BDT 1.7 billion / year.

Export Front

At present, more than fifty (50) software and IT service companies have been exporting their services to 30 countries in the world including USA, Canada, European countries, Middle East, Japan, Australia, South Africa and some of the South East Asian countries.

Software and IT-enabled services export, though started from a very low base, has been showing progressive growth during the recent years. The export stands at over 10 million US dollar in FY 2005/6, a growth rate of more than 60% over the previous year. In the first six months – July-December of current fiscal year, the growth rate has been more than 120%.

In addition to the export achievement, Bangladeshi Software and ITES providers have also been able to attract Foreign Direct Investment (FDI) through joint-venture projects with European partners. During the last 12 months delegations from as many as 40 European and North American companies visited Bangladesh resulting in 12 joint venture projects and generation of host of other potential JV projects for exporting software and IT services in European market.

In the coming years, there is every possibility that such high growth rate will prevail. Most of these joint ventures are supported by PSD (Private Sector Development) program of DANIDA. A few big software companies are also in the process of opening up much required marketing offices in USA, UK and Singapore. The local companies that are aiming exports are also focusing on process /quality improvements in line with international requirements. These initiatives are expected to yield positive results in next few years.

Workforce Dynamics and Government Initiatives

It is expected that, as more and more of the large projects (e.g. e-Governance projects, online banking projects etc.) will be available on board, the role of these important non-code activities will increase further as it should be in a matured stage of any Company.

The Government initiatives in the ICT sector are also very significant in the development of Bangladeshi ICT industry in the coming years. Formulating the proper ICT policy and enactment of IPR law are some of the major initiatives by the Government. To monitor the development of the sector and formulate action plans, there is a very high level Task Force for ICT Sector headed by the Honorable Chief of CA of Caretaker Government. Already, different Ministries & agencies of the Government have initiated e-Governance projects for delivering service to the citizens in efficient ways. The existing Government policy of allocating minimum 2% of the Annual Development Budget for ICT procurement is a big encouragement for the industry.

The rapid growth of the ICT industry has created employment opportunities for a large number of educated youth of the country and made ways for young & talented entrepreneurs to put their creative ideas into practice. To ensure the availability of qualified human resources (HR) in the market for this sector, more than 5,000 ICT students are graduating from 34+ Technology University and good quality IT Training Institutes every year.

The most important factor in the continuing development of this sector is the presence of a 16000+ qualified software application developers and technical staff working with 350 good Companies.

Overall picture of the Bangladeshi ICT industry looks very promising and it has the potential to become one of the major contributors in the economic development of the country.

Special Government policies for IT industry in Bangladesh

• IT (Information Technology) declared a thrust sector

• Government speedily implementing the 45 recommendations of JRC high powered committee for IT industry

• Waiver of all taxes and duties from import of computer hardware and software thus increasing affordability and proliferation of PC use in general, a prerequisite for the IT powerhouse that Bangladesh of 140 million people with more than 30 million Science graduates wishes to become

• Tax holiday for Software and IT services companies

• Export over internet or other electronic media recognized under sales contract or agreement without any need for any LCs

• Simplified tax free export earning remittance procedures with 40% retention in foreign currency

• Special funds allocated by government for extending collateral free loans to IT entrepreneurs

• 100% remittance of profit and capital gains for foreign investors

• Deregulation of process of acquisition and use of VSAT to facilitate faster, cheaper and higher bandwidth connection and to encourage more widespread internet use than that being provided currently by 20 or so Internet Service Providers (ISPs)

• Telegraph and Telephone Department’s implementation of DDN (Digital Data Network) as incountry high speed (upto 2 Mbps) surface link in Dhaka and four other major cities of Bangladesh.

• Decision to link to global highway through submarine cable link by next two years.

• Intellectual Property Rights law approved by President. Expected to be enacted in the next Parliamentary session.

• Government’s decision for IT village within Dhaka and High Tech Park on the outskirts of Dhaka on 47 and 264 acres of land respectively already earmarked.

• Government sponsoring marketing missions abroad to help propagate Bangladesh’s positive image abroad.

• Government very supportive of Private Sector’s initiative and closely works with industry associations such as BASIS and BCS.